The Texas Department of Insurance is now open to applications from captive insurance companies. The state will begin by licensing captives that are located in other jurisdictions that would like to relocate to Texas.
In the past, Texas-based companies that wanted to self-insure through a captive were forced to form the operations outside of the state.
Julia Rathbeger, Texas Insurance Commissioner, said: “I am pleased that the Texas Department of Insurance is moving forward with the implementation of SB 734, which authorizes the creation of captive insurance companies in Texas.”
Senator John Carona, who sponsored the bill in Texas, said: “My hope is that this legislation will encourage businesses to form captive insurance companies within the state and also provide incentive for those companies with existing captive insurance companies to re-domesticate in Texas.”
The Texas statute requires that parent companies have significant operations in Texas in order to form a captive in the state. The bill passed in Texas prohibits captives from accepting insurance policy risks of an insurance affiliate.
